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Brendan Wood International Investor Conviction Intel – Consumer – September 2024

September 18th, 2024 by TopGun Press

Below are some of the most topical Consumer Stocks on the BWI Shareholder Confidence Index based on our daily chats with global investors.

Alimentation Couche-Tard: Alimentation Couche-Tard remains relatively highly rated by investors from an investment quality standpoint, especially for being great capital allocators and its strong management, even through the current CEO transition. However, looking to the long-term, uncertainty surrounds a potential deal for Seven & i Holdings, operator of 7-Eleven. Investors say that although it could be a transformative deal that sets Couche-Tard up for years of success, there are numerous challenges, such as regulatory red tape, cost and financing concerns. If a deal goes through, significant equity would have to come to market. In the meantime, challenges with the same-store-sales metrics will be a near-term overhang according to investors. Investor confidence in the Short-Term Growth Potential and the Momentum of Investor Confidence have been under some pressure. Investors in the BWI Panel are skeptical about how much more the stock can grow, especially without organic growth drivers. As one investor put it, “I’m not chomping at the bit to buy it right now.”

Chipotle Mexican Grill: Earlier this quarter, Starbucks announced that Brian Niccol, then CEO of Chipotle Mexican Grill, would join Starbucks as Chairman and Chief Executive Officer. Shares in Chipotle were down on the day but a month later, Chipotle shares have surpassed the pre-announcement price. Why such a muted reaction to the departure of such a highly respected CEO? According to the BWI Panel, Brian Niccol fixed Chipotle’s operational weaknesses and brought discipline to the company. They say he improved the business, making it easier to manage, positioned it for long-term success and brought in the right people to carry it out. Investors view Brian as a ‘turnaround specialist’ and Chipotle doesn’t need a turnaround anymore. During his tenure, investor confidence in Chipotle’s Strategy, Long-Term Growth Potential, Bench Strength and Balance Sheet all significantly improved.

Nike, Inc: Investor confidence ratings of Nike have been increasingly negative. Among the BWI Panel there is widespread criticism of Nike’s management team. Investors cite poor execution, strategic missteps and a lack of innovation as major contributors to Nike’s struggles to keep pace with competitors. Over the last year, investor confidence in Nike’s Strategy, Board, CEO, Senior Management, Balance Sheet and the Momentum of Investor Confidence have significantly declined. Given the deteriorating confidence, reports last month that an activist investor, Pershing Square Capital Management, had disclosed a stake in Nike is not surprising. Shares moved a little on the news however investor Ownership Conviction continues to remain below the peer group and the sector averages. One panelist commented, “Nike is a tough one for an activist because it’s not really cheap. You need to change the sentiment but also the performance, which takes some time. It’s always easier if you start with a low valuation.” Do you see Nike as a potential turnaround option?

Click Here For The Recent Investor Intelligence Trends on Nike

Walmart: Walmart, historically a name investors didn’t talk about as much, has emerged as much more topical with investors since the beginning of 2024 and investors are increasingly positive on the name. In particular, investor confidence in Walmart’s Strategy, CEO, Short and Long-Term Growth Potential, Balance Sheet and the Momentum of Investor Confidence have notably improved. According to investors, Walmart is successfully broadening out from the low-margin grocery business to higher margin alternatives, particularly through its digital and e-commerce initiatives, and is investing in the supply chain and automation to lower costs. Investors are confident in the well-rounded strategy. They say that Walmart is ‘firing on all cylinders’ and positioned for sustained growth. Investors also note its highly capable leadership and its financial strength and stability, describing the balance sheet as a “fortress” or “battleship”.

According to institutional investors, the following companies showed the largest increases in Ownership Conviction in the Consumer space, YE 3Q 2024 at September 17th vs YE 2Q 2024:

Adidas AG +6.3%
Coca-Cola Co. +5.8%
Tapestry Inc +5.0%
Altria Group Inc. +4.9%

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Click here for the Brendan Wood International Investor Conviction Intel – Consumer – Starbucks CEO Transition

Click here for the TopGun Investment Minds – Best of the Best – US Consumer Sectors 2024

About Brendan Wood International:

Brendan Wood International (BWI), formed in 1970, is a private advisory group which originates performance investigation programs in the capital markets. Relying on its real time intelligence, BWI advises public companies, institutional and activist investors, investment banks and broker dealers on strategy, performance and recruitment of TopGun talent. Big cap companies looking for comprehensive investor confidence data on their organizations are likely to discover that Brendan Wood partners consult with their investors non stop year round. There are 2000+ live consultations with investment professionals overseeing +/- $60 trillion invested in the +/- 1400 big cap companies on the BWI Index. Investors depend on BWI to quantify the demand side of the investment industry, including the name by name research sales and trading professionals who influence investor demand. The firm’s partners have formally presented at 1000+ C level strategy meetings and corporate off-sites in fifty cities. Brendan Wood founded the exclusive TopGun Club, a performance based institution.

Disclaimer:

We wish to emphasize that all reports, evaluations and assessments contained herein, represent Brendan Wood International’s subjective judgment and opinions, based on our years of experience and on information obtained by us in the course of our research. Much of the factual information contained in the reports has been obtained by us from third parties on whose responses we have relied in good faith, independent verification by Brendan Wood International being, under the circumstances, impossible. While we believe that you will find our reports to be an invaluable tool in formulating your own strategies and judgments, the foregoing should be borne in mind. This report is not meant as investment advice and should not be interpreted as advising on the value of a company’s securities, the advisability of investing in, purchasing or selling any company’s securities or any other conclusion relating to investment/divestiture of a company’s securities. Finally, this report is not intended as an offer or solicitation for the purchase or sale of any company’s securities.